Identifier
Created
Classification
Origin
08NDJAMENA137
2008-04-04 08:19:00
UNCLASSIFIED
Embassy Ndjamena
Cable title:  

Chad input for 2008 Annual AGOA Report

Tags:  ETRD AGOA ECON CD 
pdf how-to read a cable
VZCZCXYZ0010
RR RUEHWEB

DE RUEHNJ #0137/01 0950819
ZNR UUUUU ZZH
R 040819Z APR 08
FM AMEMBASSY NDJAMENA
TO SECSTATE WASHDC 6139
UNCLAS NDJAMENA 000137 

SIPDIS

SIPDIS

DEPARTMENT FOR AF/EPS DAVIDSON AND POTASH

E.O. 12958: N/A
TAGS: ETRD AGOA ECON CD
SUBJECT: Chad input for 2008 Annual AGOA Report

Ref: State 020082

UNCLAS NDJAMENA 000137

SIPDIS

SIPDIS

DEPARTMENT FOR AF/EPS DAVIDSON AND POTASH

E.O. 12958: N/A
TAGS: ETRD AGOA ECON CD
SUBJECT: Chad input for 2008 Annual AGOA Report

Ref: State 020082


1. Post submits the following input for the 2008 President's Annual
AGOA report. Paragraphs/topics are organized according to the report
template and instructions.

--------------
Market Economy
/Economic Reform
/Elimination of Trade Barriers
--------------


2. Flows of foreign direct investment into Chad continued to
concentrate almost entirely in the petroleum sector. Chad has a small
formal sector and a large, thriving informal sector. Almost eighty
percent of the population is involved in agriculture (subsistence
farming, herding and fishing.) The
state remains heavily involved in most economic sectors, and parastatal
and party-affiliated companies continue to dominate trade and industry.
Over the past decade, the Government of Chad has made some progress in
privatizing state enterprises, eliminating price controls and
liberalizing the economy. Although the government continues to express
interest in encouraging foreign direct investment, investors report tha
the business climate could be significantly improved. Additionally, the
active rebellion in eastern Chad and widespread corruption dampen Chad'
economic prospects.

--------------
Trade Liberalization
--------------


3. (U) Chad has no discriminatory rules to deter foreign investors. As
a member of CEMAC (the Central African Economic and Monetary Community)
and a signatory to OHADA (the Organization for the Harmonization of
African Business Law),Chad participates in regional efforts to
standardize tax policies and commercial law, but limits investment
in sectors deemed sensitive such as cotton, electricity production, and
telecommunication in order to protect enterprises. Chad has made little
progress in reducing impediments to investment such as weak
infrastructure, chronic energy shortages, high-energy costs, scarcity
of skilled labor, a high tax burden, and corruption.

--------------
Political Pluralism
/Rule of Law
/Anti-Corruption
--------------


4. The government of Chad continues to have a weak record on rule of
law, political pluralism, and the safeguarding of due process rights.
In May 2006, flawed Presidential elections were held and major politica
opposition groups did not participate. While the law provides for an
independent judiciary, the judiciary remained weak and subject to
significant political intervention. Corruption is universally
acknowledged as one of the most serious problems in Chad.

--------------
Poverty Reduction
--------------


5. Chad remains one of the poorest countries in the world. Under an
agreement with the World Bank for oil sector infrastructure financing,
70 percent of government revenue is to be allocated to poverty reductio
and capacity building efforts. Expenditure on military spending
continues to be high, reflecting threats from rebel groups based in
Sudan. In early 2007, the International Monetary Fund (IMF) began a
review of Chad's progress to receive debt relief under the Heavily
Indebted Poor Country program. The IMF is also considering a renewal of
Chad's Poverty Reduction and Growth Facility, which failed to take plac
in late 2005. Recent comments by the IMF in early 2008 noted concerns
about Chad's deteriorating fiscal performance

--------------
Labor/Child Labor
--------------


6. Chadian law allows all employees except members of the armed forces
to join or form unions of their choice without excessive requirements,
and the government generally respects this right. Chad ratified ILO
Convention 29 in 1969 and ILO Convention 105 in 1961. Unions may
organize and bargain collectively; however, the law permits imprisonmen
with forced labor for participation in illegal strikes. The Chadian
Government's efforts to combat the worst forms of child labor have been
centered on laying the legal foundation to meet its commitments to
international labor conventions aimed at protecting children. The
government is also partnering with UNICEF on child protection
activities.

Although the labor code stipulates that the minimum age for
employment in the formal sector is 14, the government does not enforce
the law. Few children have the opportunity for education beyond the
primary level. An estimated 20 percent of children between the ages of
six and 18 work in abusive, exploitive labor conditions in the urban
informal sector as street vendors, manual laborers, domestic servants
and helpers in small shops. Children throughout the country work in
agriculture and herding. Chad has ratified ILO Convention 182, but a
comprehensive executive decree harmonizing Chad's legal code with ILO
182 and 138 submitted to the Council of Ministers in 2005 has yet
to be approved. Human rights problems include restrictions on freedom o
the press; arrest, detention, and harassment of journalists for
publishing articles critical of the government; restrictions on freedom
of assembly; and limitations on freedom of association.

TAMLYN